SAO PAULO, Jan 16 (Reuters) - Brazil’s solicitor general has overturned one injunction that prevented state-controlled oil company Petroleo Brasileiro SA from proceeding with one of its largest divestitures, the government said in a statement.

Petrobras previously had targeted the sale of a 90 percent stake in gas pipeline unit Transportadora Associada de Gas, known as TAG, which is expected to fetch more than $7 billion.

Petrobras did not immediately respond to request for comment on whether it would now be able to proceed with the sale.

New Petrobras Chief Executive Roberto Castello Branco, a market-oriented economist and former board member at iron ore miner Vale SA, has emphasized the need for the company to begin divestments in the refining and natural gas sectors.

He said in his swearing-in speech that the firm’s current domination of the natural gas production and supply chain in Brazil was bad for the country and the company, adding that Petrobras should have more competition in the domestic refining sector.

Prior to the TAG sale being blocked, France’s Engie SA had been in talks to purchase the pipeline business. Earlier this month, the chief executive of Engie’s Brazilian unit was quoted as saying he hoped to resume talks to buy it.

Engie submitted the highest bid for TAG, worth more than $7 billion, and was in exclusive contract talks with Petrobras when the Brazilian Supreme Court in July issued an injunction blocking the company from conducting asset sales. (Reporting by Tatiana Bautzer and Marta Nogueira Editing by Susan Thomas)